Oninaki has two different level up systems in the game, one for Kagachi and one for the Daemons. We already covered how to level up Kagachi in another guide, so this guide will focus on how you can level up your Daemons.
How To Level Up Daemons in Oninaki
While you start off with Aisha as your only Daemon in Oninaki, you will quickly acquire a number of others and they keep coming for awhile in the game. For each individual Daemon, there is a Skill Tree that you can access by opening the pause menu, selecting Daemons, selecting a specific Daemon on the next screen, and then scrolling down to Skill Tree.
Once here, you will see a number of different spaces that you can choose from to upgrade your Daemon, with the cost growing the further you branch out. These are paid for with special Stones you acquire the more you play with a specific Daemon in the game, as well as being able to use what are known as Null Stones that work for any Daemon when you run out of their exclusives ones.
There is no real specific layout for what you need to do specifically to level up your Daemon, but the key is to just start purchasing these upgrades all around the board and sporadically a screen will come up saying you leveled up. The more you purchase on here, the quicker you will level up, so just keep going around the board and spending your stones and the levels will come with it over time.